IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 09-40556

WAYLAND THOMAS WILSON

Petitioner-Appellant

v.

KEITH ROY

Respondent-Appellee

Appeal from the United States District Court

for the Eastern District of Texas

Before DAVIS, PRADO, and OWEN, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

Petitioner Wayland Thomas Wilson appeals the denial of his 28 U.S.C. §

2241 petition arguing that his conviction of money laundering must be

overturned based on the holding in United States v. Santos, 553 U.S. 507 (2008),

because no evidence was presented that he engaged in a financial transaction

involving profits as opposed to gross revenue derived from his illegal drug

activity. We agree with the district court that Santos did not decriminalize

financial transactions conducted with funds derived from drug activity.

Therefore, Wilson cannot demonstrate his actual innocence, which is one of the

United States Court of Appeals

Fifth Circuit

F I L E D

June 13, 2011

Lyle W. Cayce

Clerk

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No. 09-40556

threshold requirements for this petition to proceed, and the district court’s

dismissal of his petition is therefore affirmed.

I.

Wilson was convicted after a jury trial in 1993 of one count of conspiring

to distribute cocaine, three counts of using a telephone to facilitate drug

trafficking, and one count of money laundering. He was sentenced to a total of

444 months of imprisonment. His convictions and sentences were affirmed on

appeal. See United States v. Clark, 67 F.3d 1154 (5th Cir. 1995). His 28 U.S.C.

§ 2255 motion was denied, and this court denied his request for a certificate of

appealability (COA) in May 2000.

In July 2008, Wilson filed a § 2241 petition, wherein he argued that his

conviction for money laundering was invalid based upon the holding of Santos,

553 U.S. 507, because there was no evidence that he engaged in financial

transactions involving profits derived from illegal activity.

The magistrate judge (MJ) found that the issue argued by Wilson was not

cognizable in a § 2241 petition because he failed to demonstrate his actual

innocence, one of the requirements of the savings clause of § 2255, as set forth

in Reyes-Requena v. United States, 243 F.3d 893, 904 (5th Cir. 2001). Wilson

filed objections to the MJ’s report and recommendation. The district court

overruled Wilson’s objections, adopted the findings of the MJ’s report, and

dismissed Wilson’s § 2241 petition. Wilson filed a timely notice of appeal and a

motion to proceed in forma pauperis (IFP) on appeal. His IFP motion was

granted.

While this appeal was pending, this court decided Garland v. Roy, 615

F.3d 391 (5th Cir. 2010), and we obtained supplemental briefs addressing the

effect of Garland on this appeal and whether the transaction on which Wilson’s

money laundering conviction was based required the government to establish

that the funds involved were profits, as described in Santos.

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II.

Because Wilson is proceeding under § 2241, he is not required to obtain a

COA to pursue his appeal. See Jeffers v. Chandler, 253 F.3d 827, 830 (5th Cir.

2001). “In an appeal from the denial of habeas relief, this court reviews a

district court’s findings of fact for clear error and issues of law de novo.” Id.

A petitioner can attack the validity of his conviction and sentence in a

§ 2241 petition only if he can meet the requirements of the “savings clause” of

§ 2255(e). Kinder v. Purdy, 222 F.3d 209, 212 (5th Cir. 2000(per curiam). The

petitioner shoulders the burden of affirmatively showing that the remedy under

§ 2255 would be “inadequate or ineffective to test the legality of his detention.”

§ 2255; Reyes-Requena, 243 F.3d at 901.

Relief under § 2255 is not “inadequate or ineffective” for purposes of the

savings clause merely because the prisoner has filed a prior unsuccessful § 2255

motion or is unable to meet the requirements for filing a second or successive

§ 2255 motion. Tolliver v. Dobre, 211 F.3d 876, 878 (5th Cir. 2000). Rather, a

prisoner who wishes to proceed under the savings clause must make a showing

of both actual innocence and retroactivity. Reyes-Requena, 243 F.3d at 903. A

prisoner can make this showing if his claim (1) “is based on a retroactively

applicable Supreme Court decision which establishes that the petitioner may

have been convicted of a nonexistent offense” and (2) “was foreclosed by circuit

law at the time when the claim should have been raised in the petitioner’s trial,

appeal, or first § 2255 motion.” Id. at 904.

Retroactivity of Santos.

In Garland, this court held that Santos applies retroactively. 615 F.3d at

396-97. Thus, Wilson has satisfied the first half of the first Reyes-Requena

factor.

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Nonexistent offense.

Relying on Santos, Wilson argues that he is actually innocent of money

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laundering because he did not conduct a financial transaction that involved the

profits of a specified unlawful activity and, as a result, he was convicted of a

nonexistent offense. Section 1956(a)(1) provides that:

Whoever, knowing that the property involved in a financial

transaction represents the proceeds of some form of unlawful

activity, conducts or attempts to conduct such a financial

transaction which in fact involves the proceeds of specified unlawful

activity . . . (A)(i) with the intent to promote the carrying on of

specified unlawful activity

is guilty of money laundering. 18 U.S.C. § 1956. In Santos, the issue was

whether “proceeds” should be interpreted broadly to mean “receipts” of specified

unlawful activity or narrowly to include only the “profits” of such activity. 553

U.S. at 509. Santos had been convicted of operating an illegal gambling business

(a lottery) in violation of 18 U.S.C. § 1955, as well as conspiracy to launder

money and money laundering involving funds derived from these illegal

operations. Id. at 509-10. The transactions on which Santos’s money laundering

conviction was based involved his payments to those who helped him run his

lottery, as well as payments to the lottery winners. Id. A four-Justice plurality

applying the rule of lenity concluded that the word “proceeds” in the money

laundering statute means “profits” and not, as the Government had argued,

“receipts.” Id. at 510-14 (plurality opinion). The plurality concluded that this

Wilson also argues that the savings clause applies based upon the Supreme Court’s 1

decision in Cuellar v. United States, 553 U.S. 550 (2008). However, he makes this argument

for the first time on appeal, and that argument will not be considered. See Page v. U. S. Parole

Comm’n, 651 F.2d 1083, 1087 (5th Cir. 1981) (per curiam) (refusing to entertain § 2241

petitioner’s claims raised for the first time on appeal). Accordingly, this opinion addresses

only Wilson’s arguments related to Santos. 

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definition prevented a “merger problem” by which the underlying illegal

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activities would also constitute money laundering when the offenses involved

transactions in which receipts were passed on to someone else. Id. at 515-17.

Justice Stevens, the tie-breaker, concurred in the judgment that “proceeds”

means “profits” where the specified unlawful activity is illegal gambling because

the legislative history of § 1956 was silent as to this type of venture. Id. at 524-

28 (Stevens, J., concurring). However, he reasoned that the definition of

“proceeds” could vary depending on the unlawful activity forming the predicate

for the money laundering charges. Id. In today’s case the unlawful activity

forming the predicate for the money laundering charges is drug trafficking.

In Garland, the money being laundered was derived from a fraudulent

pyramid scheme. This court interpreted Justice Stevens’s concurrence as

requiring a bifurcated analysis. Garland, 615 F.3d at 402-04. The first step

requires a court to determine whether giving “proceeds” a broad interpretation

to mean “receipts” would result in merging the underlying illegal activity with

the money laundering charge. The second step requires an examination of the

legislative history of the money laundering statute to determine if “proceeds”

should be defined as “profits” in a particular case. Id. at 403-04.

But we conclude that the Garland inquiry is unnecessary in this case

because Wilson was convicted of laundering money derived from the sale of

The Santos plurality explained the merger problem that existed in the illegal lottery

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operation in that case as follows: 

If “proceeds” meant “receipts,” nearly every violation of the illegal-lottery

statute would also be a violation of the money-laundering statute, because

paying a winning bettor is a transaction involving receipts that the defendant

intends to promote the carrying on of the lottery. Since few lotteries, if any, will

not pay their winners, the statute criminalizing illegal lotteries . . . would

“merge” with the money-laundering statute.

553 U.S. at 515-16.

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contraband, i.e., illegal drugs. Santos was a split decision by the Supreme Court

with a four-Justice plurality forming the majority on the issues joined by Justice

Stevens’s concurrence. In Garland, we held that Justice Stevens’s concurrence

was the controlling law. Id. at 396 n. 4.

 Justice Stevens agreed with that part of Justice Alito’s dissent asserting

that “the legislative history of § 1956 makes it clear that Congress intended the

term ‘proceeds’ to include gross revenues from the sale of contraband and the

operation of organized crime syndicates involving such sales.” Santos, 553 U.S.

at 525-26. For this reason, Justice Stevens could not “agree with the plurality

that the rule of lenity must apply to the definition of ‘proceeds’ for these types

of unlawful activities.” Id. at 526 n.3. We read these passages from Justice

Stevens’s concurrence to say that when the laundered money is derived from the

sale of drugs and other contraband, Congress used “proceeds” in § 1956 to mean

receipts rather than profits regardless of any potential merger problem. Justice

Alito’s dissent quotes Justice Stevens on the point that the legislative history

makes it clear that in cases involving the sale of contraband, “proceeds” in the

money laundering statute means gross revenues. Justice Alito explains in a

footnote that on this point the dissent and Justice Stevens’s concurrence form

a majority.

In light of the plurality opinion's discussion of "the stare decisis

effect of Justice Stevens' opinion," ante, at ____, 170 L. Ed. 2d, at

926, it must be noted that five Justices agree with the position

taken by Justice Stevens on the matter discussed in the preceding

sentence of the text.

Id. at 532 n.1 (Alito, J., dissenting).

As indicated, this court in Garland determined that Justice Stevens’s

concurrence is the controlling law. Accordingly, in this case, which involves

laundering the proceeds of the sales of illegal drugs, Santos does not have the

effect of undermining Wilson’s money laundering conviction, and thus Wilson

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cannot satisfy the requirement that he may have been convicted of a nonexistent

offense. Therefore we need not consider the remainder of the test, i.e., whether

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his claim was foreclosed by circuit law so that he is excused from raising it when

it should have been raised at trial, on direct appeal, or in his first § 2255 motion.

III.

For these reasons, the district court did not err in denying Wilson’s

petition under § 2241. Accordingly, the judgment of dismissal is AFFIRMED.

We follow a number of other circuits that have reached the same result in drug 3

trafficking cases based on this interpretation of the above passages in Justice Stevens’s

concurrence. See United States v. Quinones, 635 F.3d 590, 599-600 (2d Cir. 2011) (Justice

Stevens’s opinion is controlling, and he specifically noted that “proceeds” is not intended to

mean “profits” where the predicate offense involves the sale of contraband); United States v.

Smith, 601 F.3d 530, 544 (6th Cir. 2010) (“As Justice Stevens made clear in his concurring

opinion in Santos, the predicate offense of conspiracy to distribute cocaine does not fall within

the category of offenses for which ‘proceeds’ means ‘profits.’”); United States v. Webster, 623

F.3d 901, 906 (9th Cir. 2010) (In drug cases, ‘proceeds’ is not defined as ‘profits.’); United

States v. Brace, 634 F.3d 1167, 1170 n.3 (10th Cir. 2011) (“Even if Brace could raise a Santos

argument, he would not prevail because Santos does not hold that “proceeds” means “profits”

in the context of drug sales. Justice Stevens, the critical fifth vote in Santos, explicitly

departed from the plurality’s conclusion that “proceeds” means “profits” in the context of drug

sales.”).

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